Stocks undergo correction after massive rally
KARACHI: Bulls took a breather after several days of rampage that had pushed the KSE-100 index up by 2,339 points (6.2 per cent) and on Tuesday retreated by 335 points (0.84pc) to close at 39,788.
Although the market expected another major rally on the back of Moody’s Investors upgrade of Pakistan’s outlook from ‘negative’ to ‘stable’, and affirmation of the country’s rating of B3, but traders believed that investors felt dizzy at the height of 40,000- level and decided to book profit.
Yet the tone of the market seemed to be positive with overall confidence of investors receiving a boost by the improving economic data, shrinkage of twin deficits, successful International Monetary Fund review, steady foreign exchange reserves, stronger rupee, falling bond yields, growing inflows in T-bills and expectations of monetary easing in the upcoming State Bank policy. There was some dust stir up on the political front but not enough to cause much concern.
The volume declined 20pc to 448.5 million shares, from 557.4m while traded value dropped by 12pc to $93m as against 106.1m. Stocks that contributed significantly included K-Electric, TRG Pakistan, Bank of Punjab, Maple Leaf Cement and Fauji Foods, which formed 27pc of total turnover.
Banking, which was the favourite on Monday, saw selling pressure. Other sectors which also came under hammering were autos, fertilisers, exploration and production, steel and cement. Refinery performed well with Attock and National hitting upper circuits.
Sector-wise, negative contribution came from banks, lower by 116 points, followed by cement declining 80 points.
Among scrips, the index was dragged down mainly by Engro Corporation at 2.43pc, Lucky Cement, decreasing by 2.77pc, DG Khan Cement 3.62pc, Fauji Fertiliser 0.54pc and banking scrips namely United 1.85pc, Al Habib 1.93pc, Habib Metro 3.33pc, National 2.49pc, Meezan 1.82pc and Bank of Punjab 3.55pc. In addition, Sui Northern Gas dipped 4.34pc, Hub Power 0.84pc and Oil and Gas Development Company 0.79pc also were major losers.
Published in Dawn, December 4th, 2019
